First Bank of Nigeria Plc said it has committed about N500 billion to financing oil and gas projects in Nigeria, to enhance local capacity and competitiveness, its Executive Director for Corporate Banking, Mr. Kehinde Lawanson, has said.
Lawanson, who spoke to journalists on the sidelines of a forum sponsored by the bank at the Offshore Technology Conference (OTC) in Houston Texas, USA, said the sum represents the bank's total financing activities for the upstream, midstream, and downstream sub-sectors of the oil and gas industry.
First Bank of Nigeria Plc said it has committed about N500 billion to financing oil and gas projects in Nigeria, to enhance local capacity and competitiveness, its Executive Director for Corporate Banking, Mr. Kehinde Lawanson, has said.
Lawanson, who spoke to journalists on the sidelines of a forum sponsored by the bank at the Offshore Technology Conference (OTC) in Houston Texas, USA, said the sum represents the bank's total financing activities for the upstream, midstream, and downstream sub-sectors of the oil and gas industry.
He said, "Our total play in the oil and gas industry as at 2011 is well over N500billion," adding that the bank controlled at least 25 per cent of the industry financing.
"First Bank is widely acknowledged as the leading player in oil and gas financing and has a proven pedigree in providing both financial and advisory backing for players in the sector." Lawanson said.
He disputed the fact that most of the finance was channeled to the downstream sector for products importation, as opposed to the upstream which required long erm financing, saying, "That is not very true, I can say we are very actively involved in virtually all the Marginal Fields and service companies, most of those who bought the oil blocks were financed by First Bank.
"We are committed to growing our involvement in the oil and gas industry, and assisting particularly indigenous firms take full advantage of the opportunities in the industry in line with the Nigerian local content act," he added.
Some of the Bank's financing activities in the sector include funding rig acquisition for indigenous operators, financing lines to indigenous fabricators for oil and gas contracts, funding specialized vessel acquisition scheme for local content support, and supporting major pipeline distribution and gas infrastructural development projects in several communities.
Lawanson said the bank was at the forefront of assisting indigenous firms take full advantage of the Nigerian Content Act, by providing requisite financing, but urged local firms to embrace good corporate governance practice and seek sound financial counseling to enable them improve their risk profile.
According to him, this would position industry operators properly for increased funding from the financial institutions.
Lawanson told guests at the forum that the bank had over the years remained a major player in infrastructure financing in the oil and gas sector. He listed some of the Bank's activities in the sector to include:
• Vessel finance facility of $52.0million for the purchase of two jack-up badges to be leased to Mobil Producing for the execution of a Mobil contract. The U.S. Exim Bank provided fund for $36,021,786.55 (guaranteed by First Bank)
•The Bank provided a US$15.15million Term Loan to finance the acquisition of two vessels to service a five year charter party contract awarded by Chevron Nigeria Limited to Marine and Oil Services Nigeria Limited, a wholly indigenous company
•$29.04million Asset Finance Facility for the procurement of a field maintenance vessel for Broron Oil and Gas Limited. The facility enabled the company procure a 78m – DP2 multifunctional field support / maintenance vessel with State of the Art equipment. The vessel, DSV Avianna, was built in China in 2001.
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